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Summary:

There was a flurry of activity this week in the over-the-top video space as Samsung announced that its HDTVs will start streaming content from both Amazon VOD and Blockbuster (which will also be available on select Samsung Blu-ray players). This follows on the heels of Blockbuster […]

There was a flurry of activity this week in the over-the-top video space as Samsung announced that its HDTVs will start streaming content from both Amazon VOD and Blockbuster (which will also be available on select Samsung Blu-ray players). This follows on the heels of Blockbuster being made available on TiVos. And if that wasn’t enough, Sonic Solutions said that its CinemaNow movie service will be available on connected HDTVs and Blu-ray players from Funai Electric Co. (which makes devices for Sylvania, Philips, Magnavox and Emerson).

Phew! That’s a lotta video delivered directly to your TV. The over-the-top dial is getting crowded, not just with these players, but also with Vudu, which is making moves to get its streaming service on more devices, and Netflix, which was one of the first in the direct-to-TV streaming space.

I wrote a longer piece on this for our subscription research service, GigaOM Pro, a few months back, in which I posed the question: When movies are available everywhere who wins? After all, if every movie service is on just about every device, and they’re all offering the same titles (for the most part), how do you choose?

In olden times, you might have been loyal to a particular video store because it was in your neighborhood, or it had better selection, or cuter clerks, who appreciated how sensitive you were for renting Sophie’s Choice. But geography and choice are no longer factors when everything’s accessible with a push of a button.

I’m not counting on the long-term viability of the smaller players like Vudu and CinemaNow as standalone services. Amazon, Netflix and even the battered Blockbuster have more mindshare and brand trust with consumers, plus many of us already have an account with Amazon and Netflix (though Netflix’s subscription service is a slightly different beast). And don’t get me started on Apple and its hobby, the Apple TV.

But how will you pick which movie service to use? Will it be based on picture quality? Price? Placement in connected device’s widget bar? Leave us your thoughts in the comments.

  1. We have to assume that selection and picture quality will ultimately be virtually the same. Price could be a big differentiator, and for me Netflix’s subscription has the advantage now. If everyone moves to a similar pricing model, then I think the services will have to differentiate on user interface (search, recommendations, queue management, etc.). And initially, brand loyalty will be key. Many Netflix, Blockbuster, and Amazon users are likely to stick with their current brand out of familiarity and loyalty.

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  2. The answer probably involves dividing the process into two steps: selection and delivery. When “everything’s accessible with a push of a button,” people want to see the universe of options, separate from delivery. Just as we go to Google to locate information, people will choose what they want to see (the outside, selection step), then choose a delivery service based on price of the specific video and delivery quality.

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  3. As long as I am not paying a recurring fee (e.g. Netflix) I am free to see what movies are on sale from Amazon and Blockbuster right now.

    So why choose? The only choice is which service do I check first.

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  4. Thanks, Gary, Phoebe and Steve.

    Do you think that we’ll see more content exclusives between studios and streaming services then in an attempt to get people on-board? And what will the role of manufacturers like Samsung be who create the menu of options and can provide higher placement to some over others?

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  5. And the answer is – none. I used Amazon some when it first released on Tivo, but only for the 99cent sale movies. I don’t even bother to check for those now. My problem with video rentals are the $3.99 price, which is past my value point for a movie. With Netflix player I’m capable of finding a movie to watch when I need to, and can wait for first-runs to be delivered by mail.

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    1. Hey LH,

      You are precisely why Netflix is holding on to the hybrid model. What is the right price point for you? 99 cents?

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  6. Chris, interesting follow-up questions!

    No, I don’t see this leading to exclusivity. We already see a many-to-many relationship between content providers and delivery points like boxes or kiosks.

    Regarding the second question, one possibility is that manufacturers will not dictate UI: TV companies will focus on providing a development platform like Yahoo TV widgets for discovery and delivery companies building apps, which users will then choose among.

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    1. Chris Albrecht Friday, October 16, 2009

      Hi Phoebe and Gary,

      But not all TV manufacturers use the Yahoo widget platform, correct? So Vizio and Panasonic have their own menu systems where they can promote content as they like. The jury’s still out as to whether people want full Internet browsing on the TV, which would negate the power of the TV manufacturers.

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  7. Chris, I think TV manufacturers will have as much control as computer manufacturers have now. Which is basically none. Consumers will demand the ability to choose their own service and content providers.

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  8. I live in the country, so my broadband isn’t up to snuff for streaming. we use netflix, but I avoid watching stuff I would get too involved in. So, I’m looking for a download in advance service at the same cost.

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  9. amazon owns all, just saying, it is true.

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  10. [...] time to turn back to video after last week’s all-wireless coverage, and a post over on NewTeeVee raises an interesting video question. Content providers and CE manufacturers are racing to pair up [...]

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  11. To me there are three 3 obvious strategic differentiators:
    1) User interface, presuming that each service will successfully be able to present its own UI (i.e. TV manufacturers will not control the UI) and some will offer better usability than others

    2) Pricing, which I would expect to become more competitive over time for everything except major studio content. I also expect that new pricing models will be tested, such as an annual or lifetime subscription to every episode of a series such as the Simsons or Seinfeld or special movie subscriptions in the Horror genre for example

    3) Selection, in which I believe a key factor will be the availability of “long-tail” content. If I’m a surfing or fishing fanatic, the service with the largest library of niche programming will appeal to me most.

    Lastly, you have to take into consideration the degree to which each platform allows content producers to customize their business models. Content producers will eschew closed systems where they have little to no control (aka Apple) in favor of platforms that will enable them to serve multiple pricing plans, paid and/or ad supported models, subscriptions, etc with an especially careful eye on the rev share they will earn in relation to the platform provider.

    Folks, this is like VHS and Beta, Blu Ray and HD DVD. In the end there will only be 2 or 3 major competitors and the rest will be swallowed or simply go away. I will place my bets on Netflix, Amazon, and Apple.

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  12. gosh the new series of V kicked off the other night and I missed it – but not to worry I found it at http://www.watchvepisodes.blogspot.com – so if you don’t have a tivo like me – this will do the trick for you too.

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